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South Hadley Town Meeting approves tax break for Mohawk Fine Papers to locate envelope plant in town

Posted November 12, 2014 at 10:45 PM

Mohawk Fine Paper Inc. executives Robert Scammel and on his right Ed Knott

Mohawk Fine Paper, Inc. senior vice president Robert Scammel, left, and Mohawk purchasing director Ed Knott are shown in the South Hadley town hall lobby following Town Meeting's unanimous approval of a tax break for the company Wednesday night.
(Jim Russell photo)

Mohawk officials attended the South Hadley meeting and told reporters after the affirmative vote they liked what they saw.

They also said much work remains in their negotiations with the respective communities before deciding where to set up a manufacturing center that is expected to produce 500 million envelopes annually in the region.

"We are looking to make a decision (on Chicopee or South Hadley) prior the December 17" date when the state is slated to act on approving the tax break, said Mohawk senior vice president Robert Scannell. "The unanimous vote was a tremendous outcome."

Officially labeled a "special tax assessment," the measure provides Mohawk an exemption from paying real estate taxes the first year it operates.

It requires a 25 percent payment the second year, 50 percent in year three, 75 percent the fourth year, and full tax payments thereafter.

State approval is also required for it to take effect.

Company officials said the state is expected to act on the tax idea during a Dec. 17 meeting.

"This is an exciting opportunity," selectman chairman John Hine told town meeting prior to the vote.

Town Administrator Michael Sullivan said if Mohawk selects South Hadley, the company is expected to be in operation by April.

He said the current tax on the property is $70,000.

Sullivan also said the company would invest $2 million at the 28 Gaylord St. property, which it plans to lease. That, and improvements the owner has pledged would increase the tax value by about $40,000, Sullivan said.

The application for the special tax assessment Mohawk filed with the state shows the company forecasts employing 37 full time workers at the 100,000 square foot parcel it would lease from Lakestar Properties.

Founded in 1931, the Cohoes, N.Y., company employees 540 and operates mills and converting facilities there as well as Ohio, California, Washington, and the Netherlands.